Reuters wrapped in the Red

An already jittery market may shrink even further in the aftermath of news giant Reuters posting its first loss ever since going public on the FTSE in 1984.

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By  Massoud Derhally Published  July 23, 2002

An already jittery market may shrink even further in the aftermath of news giant Reuters posting its first loss ever since going public on the FTSE in 1984.

Analysts say the results are due to Reuter’s ailing electronics-trading unit, Instinet, which is down 38% for the first six months of 2002. Instinet posted an operating loss of US $92 million.

Reuters reported a pre-tax loss of US $139 million, compared with a profit of US $535.5 million a year ago.

Group revenues declined 5% to US $2.7 billion for the first half of 2002.

Reuters net debt also rose to US $304.5 million.

The negative results come on the back of a wave of layoffs that placed Reuters under the spotlight.

'We expect market conditions to remain challenging, but we are taking the tough actions needed to protect our franchise, improve our competitiveness and position us for profitable growth when markets recover,” said Tom Glocer in an interim statement on July 23, 2002.

“We have a strong balance sheet, good cash conversion, a powerful brand and talented staff guided by a tradition of robust corporate governance. I am confident that these strengths, supported by our ongoing transformation programme, will translate into financial success as we progress with our five-year plan,” Glocer added.

According to a company source in the Gulf, Tom Glocer, group chief executive, is expected to address staff members via a conference call this afternoon to discuss the mid year interim results.

With layoffs that took place in the summer of 2001 and those about to take place now Reuters will have shed around 2,750 jobs of its core workforce, which stood at 19,000 in December of 2001.

Michael Kuli, managing director for the Gulf region was not available to comment. Issam Maki, marketing manager, would not comment on the results, and how if any, the company’s operations in the Middle East would be affected by the financial results. However, Scott Doak, finance and admin manager at Reuter’s Dubai, told ITP.net, “This was obviously expected. But we foresee achieving the targeted margins by the end of the year.”

Subsidiaries and affiliates of Reuters include: Dow Jones Reuters Business Interactive LLC, Instinet Group Incorporated, TIBCO Software Inc. and The Yankee Group.

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